Initial Exchange Offering and Binance Launchpad - Crypto Academy / S5W6 - Homework post for @ nane15
1. Explain in your own words what an IEO is.
We come across different projects developed on different blockchain technology-based platforms now before the inauguration of such projects these projects are first promoted among individuals through the different methods by using social media or whatever way so that they can raise funds for the comfortable launch of their new project so one such of way to raise funds is initial exchange offering or IEO.
Initial exchange offering came out and fixed issued face by ICO(Initial coin offering) as they are centralized that gives investors a reliable place to invest however all the IEO, ICO, IDO refers to fundraising methods for different projects.
So the IEO functions in a way that whenever there’s a new project launch it goes through a pre-sale period so what happens is when a project is launching the founder of that project allows the token of that project on exchanges for investors or individual users before the actual launch of the project so that they can generate funds from their investments now since it is done on popular and known centralized exchanges it ensures users of the authenticity of the project so they can invest safely. Now the exchanges they use to initiate the pre-sale of tokens have their native platforms or Launchpad where their tokens are launched.
So the IEO platforms verify the project authenticity before launching it on the exchange hence the method attracts the audience more.
2. Do you consider IEOs an advantageous way to invest? Explain.
Though I can answer the asked question in one sentence i.e. “YES, IEO is an advantageous way to invest” now for explaining I have a different reason such in IEO the investor doesn’t invest directly in developers or projects but he invests through an exchange that takes 30% of the commission and 70% to project so that ensure investors about their investment authenticity.
However, the benefits aren’t limited to authenticity but also that an investor can make a purchase of assets at a lower price while selling them later when the price gets high so there are chances of seeking high profits in the IEO method. Apart from this as we discussed above the exchange being centralized first verifies the project before they list the coin on their platform hence investing in such projects is more reliable always.
3. List advantages and disadvantages of participating in an IEO.
Advantages of participating in an IEO:
• Participating in IEO helps investors to invest in authentic projects hence they are saved from frauds who are looking for their money only. In short, IEO provides opportunities for safe investments in projects.
- The token in IEO are in the pre-sale period and are cheaper than later on hence traders can earn themselves heavy profits by buying at a cheap price and selling them once the price increases.
- Since exchanges are centralized so they verify the project before listing its token on their platforms so one can carry out their investment with more confidence.
- One of the benefits is the opportunity is to be a part of the project even before its official launch.
Disadvantages of participating in an IEO:
- One of the major flaws of IEO is fees being paid to exchanges by founders or developing teams to list their tokens on that exchanges so in the case where developers don’t have enough fees so they compromise on lending some of the tokens to exchange as fee.
- Investments are very risky since one cannot be assured of the success of the project after its launch so the investments can turn out to in lost if the project doesn’t get recognition after its launching.
- We are familiar with these launching platforms gaining popularity with time along with the number of projects that will be launching is also increasing so with the crowd of these projects there can be a chance of project not being verified completely that can result in scammers doing their job.
4. Explain how to participate in an IEO, for the process explore various exchanges, choose one of them and explain the process. (Use screenshots.) (No need to participate, just register, present proof of verified account and explain the whole process, do not use Binance)
Participation in IEO is done when you get to know about a new project through any advertisement or any promotion method on different platforms so you dig on that project and verify its authenticity and look upon the exchanges that support that particular project or the process can be carried out in a way that if users are interested in participating IEO they can visiting different IEO and their upcoming projects and can invest further.
Now below I’ve listed out various exchanges that I have explored from coincodex platform.
Houbi Global’s IEO’s list:
KuCoin’s IEO’s list:
Bitfinix’s IEO’s list:
Bittrexx’s IEO’s list:
Now for explaining the process I’ll be choosing the “ coincodex” platform first we can see the different projects here we can select any desired project for example let us have a look at Houbi global exchange projects so from the list below we selected the MonoX project:
Now next we will be navigated to a page that contains details of this project here we will tap on the view Launchpad button.
Now this will take us to an exchange that supports this project which we know is Kucoin in this case so here we will first log in to this exchange or create our account after that you will verify your account through the KYC process.
Lastly, you can go and invest in the desired project through Launchpad.
5. As an example of a project that had a successful IEO, explain that project. Be on topic. (Use from screenshots.)
The project that had successful IEO I’ll be using for example is Bittorent that is a data-sharing site owned by Tron blockchain the IEO turned out successful as funds of approximately $7.2 million were raised.
The native token of this platform is BTT that is the TRC-10 standard token and the purchases were made using BNB and TRX token and the platform used for this IEO was Binance Launchpad and took place in January of 2019.
The purchases were allowed in two phases first with BNB and secondly with TRX token i.e. native tokens of binance and Tron blockchain so the BNB phase yielded * BTT and TRX phase yielded * BTT and a total of* BTT was yielded through this IEO and it lasted for approximately 15 or 13 minutes considering both the phases.
Here we can summarize the IEO stats from the screenshot above:
Token: BTT
Funds raised: $7.2M
IEO Platform: Binance Launchpad
Price at IEO: $0.00012
Price Now: 0.00285
Conclusion
So if we conclude here in this assignment we covered details on IEO with its advantages and disadvantages and importance of it to invest also we explored various platform where IEO take place. So IEO is a method of raising funds for different projects being launched on different platforms and is said to me popular most way of raising funds for projects but it targets a selected audience only and it is not easy for everyone to take participate in IEO. The investors can earn their profit by purchasing assets at low prices in the pre-sale period and selling them when the price increases later on however one is not 100% sure if the project is going to earn them profits after its launching or not.
Lastly, I would like to appreciate the professor's effort in the lecture and hope that I met his requirement and expectations for this assignment.
Thank you.